Defining the Supplier Base for Swedish Automotive Industry in Russia: Case Study for Volvo 3P

• In order to succeed in Russia Volvo need source locally due to several reasons, such as governmental restrictions, necessity to decrease costs, ambitions to maintain and increase competitiveness in the future. It is necessary to define the supplier base in Russia and to develop a strategy for local sourcing. The purpose of the study is to describe automotive supplier base in Russia, in terms of historical background, structure, compliance with international standards and Volvo requirements. Another objective is to define which factors influence the supplier base in Russia. The study also includes Russia country profile with business climate outline which would facilitate understanding of automotive business set up in the country. In order to understand the availability of suppliers and possible challenges for sourcing, number of interviews with people involved in sourcing where conducted. Description of supplier base was supported by secondary data analysis. The study has shown that Russian automotive industry differs from the traditionally established in the western world in terms of general structure of industry, business set up, relations between suppliers and customers, level of competitiveness and development, etc. Due to that Russian supplier base cannot comply with the up-to-date requirements of the global customers in most of the cases. Global suppliers are reluctant to come to Russia due to many reasons. For Volvo sourcing strategy it is recommended to choose multiple source approach. It includes implementing of local Russian suppliers and helping them to develop and inviting global suppliers to come to Russia. In both cases, Volvo and suppliers have to commit into long-term partnership relationships.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business (hsv//eng)

Keyword

Russia

Volvo

Supplier Base

Russian Automotive Industry

Local Sourcing

Global OEM

Publication and Content Type

vet (subject category)

ovr (subject category)